Sim Leisure gets RM7m loan from controlling shareholder for KidZania deal

SIM Leisure Group, through its subsidiary, has obtained a loan of up to RM7 million (S$2.3 million) from its controlling shareholder Tan Boon Seng, in part to fund the group's proposed acquisition of the operator of family attraction KidZania in Kuala Lumpur.

The loan agreement, which was entered into on Nov 20, comprises a term funding of RM5.3 million and a funding portion of RM1.7 million.

The term funding, which will be used for the acquisition, will be made available to subsidiary Sim Leisure Escape for up to 24 months from the date of the loan agreement.

The funding portion, which will be used for the group's general working capital purposes, will be made available for up to 60 months from the date of the first draw-down of the term funding.

The loan holds an interest rate of 8 per cent.

Sim Leisure is looking to acquire the entire stake in loss-making Rakan Riang, KidZania's licensee, for RM3.8 million.

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Rakan Riang is a joint venture between Themed Attractions Resorts & Hotels (the leisure and tourism arm of Malaysian sovereign fund Khazanah Nasional) and Malaysia-listed Boustead Holdings Berhad.

Sim Leisure said it had used its "best endeavours" to explore other financing options, but these were limited in light of present market conditions.

The lender, a non-independent, non-executive director of the company, has a direct and deemed interest in about 0.68 per cent and 17.5 per cent in the group. The loan agreement is thus deemed to be an interested-person transaction.

Sim Leisure has requested to lift the trading halt that it called for on Monday. Shares in the group last traded at 22.5 Singapore cents on Nov 19.

The Singapore outlet of Kidzania closed in the middle of this year and has commenced liquidation. The KidZania theme park gives children a taste of careers such as firefighting, window washing, medicine and journalism through role-playing in an interactive mini-city.

The KidZania brand is an international franchise with 29 facilities in 22 countries worldwide, said its website. These include outlets in cities such as Kuala Lumpur, Bangkok and Manila.